Steel and aluminum companies have made progress, but oil firms lag behind
Nearly four years after President Xi Jinping vowed to shake up State-owned enterprises, 2016 appears to be another mixed story for oil and gas producers, steelmakers and aluminum smelters, with some grappling with declines while others are turning losses to profits or even beating earnings estimates.
Experts call for government and State-backed companies’ determination to push for the ongoing reforms.
China’s big three oil companies had another tough year coping with the crash in crude-oil prices.
China National Petroleum Corporation said in a statement earlier that net income during the first nine months of 2016 fell 94 percent to 1.73 billion yuan ($252.4 million), with full-year results poised to “decrease substantially” from 2015.
China National Offshore Oil Corp didn’t fare better. The country’s biggest offshore oil and gas producer posted a 23.2 percent yearon-year drop in sales for the first three quarters of 2016, but didn’t report its earnings.
China Petrochemical Corp, a relative downstream player compared with CNOOC and CNPC, managed to register a 11.2 percent growth of net profits for the first nine
Reform of the bloated Stateowned energy firms in the highly-monopolized oil and gas sector is economically important.” Fielding Chen Shiyuan, Hong Kong-based Asia economist at Bloomberg Intelligence
months of last year.
“Reform of bloated Stateowned energy firms in the highly-monopolized oil and gas sector is economically important, always centering on improving economic efficiency and ensuring national energy security,” said Fielding Chen Shiyuan, Hong Kong-based Asia economist at Bloomberg Intelligence.
Chen said the difference of energy giants’ earnings performance will not make the reform change course. But, he said, “the hard fact is we are moving too slowly over the past few years.”
Though conglomerates set up operational branches to raise business efficiency, it is far from enough to solve the market access problem at its